Cooper has coached the Chiefs for the past two years taking to the quarterfinals in 2018 and 2019 and was due to lead the side in 2020 but has cited the lack of hands on coaching as having played a part in his decision.
"The role of the head coach has evolved so much over the past five or six years," he said.
"My passion is 'hands-on' on-the-field coaching, but with bigger playing numbers and more staff involved these days, I am getting taken further and further away from my passion."
Cooper said he would now take a break to consider his future.
"For now, my focus is to complete our season review, and then my priority is to spend time with my whanau, and moko who are continuing to grow."
The former Waikato coach Warren Gatland, who's leaving the Wales job after this year's World Cup, has previously said he's interested in returning to a Super Rugby role in New Zealand.
However Gatland was re-appointed earlier this month as British and Irish Lions coach for their 2021 tour of South Africa.
The Chiefs CEO Michael Collins said he and Cooper had been in discussions for several weeks, which meant the Chiefs could begin their recruitment process discreetly without interrupting the 2019 campaign.
New Zealand Rugby Chief Executive Steve Tew said "Coops is a remarkable individual with great presence and mana. We know Coops to have a special talent in communicating with young men and working to bring the best out of those in his charge, and to help grow outstanding individuals on and off the field.
"We appreciate that he will have some decisions to make and while he will have choices in front of him, we hope his special abilities won't be lost to New Zealand rugby."
Cooper said he was proud to have been part of the Chiefs Rugby Club and leading a "great group of young men".
"I believe the team and the club are bigger than the individual and the club comes first. With next year the start of a new World Cup cycle, I believe it is the right time to step aside. There is a good crew of players and staff here who are committed to carrying the club forward," Cooper said.
Cooper has been coaching rugby professionally for more than 20 years.
He took on the role of Chiefs head coach after eight successful seasons leading Taranaki, during which time he also coached the Māori All Blacks for five years.
Previously he was head coach of the Hurricanes for eight years.